MOSCOW (MRC) -- The European Commission has approved the proposed acquisition of Germany-based construction chemicals producer MBCC by Switzerland’s Sika, said Reuters.
The approval, under the EU Merger Regulation, is conditional on the divestiture of MBCC's global chemical admixture business.
As initially proposed, the Sika-MBCC combination would have “substantially reduced competition” and led to higher prices and less innovation in the European Economic Area (EEA) in the markets for chemical admixtures and concrete admixtures, the Commission said.
The merged entity would have "very large market shares" and would only face competition from very few other competitors in the EEA markets for chemical admixtures, the Commission said. The markets for chemical admixtures are characterised by significant barriers to entry, such as the need to have a sufficiently large customer base, strong sales force and technical team, high volumes of orders and know-how to compete, it said.
Sika and MBCC were "key innovators and global leaders” in the development and supply of chemical admixtures and construction materials, it said. The development of new polymers and new formulations of chemical admixtures play a key role in the concrete industry, in particular to address sustainability challenges, such as bio-based admixtures.
"We were concerned that the combined entity could foreclose competitors," said Margrethe Vestager, EU executive vice president in charge of competition policy.
We remind, INEOS Enterprises has today signed an agreement to acquire MBCC Group’s Admixture Business from Sika AG. The admixture business is a leading producer of concrete additives essential for the construction industry, with well invested operations across 35 manufacturing sites and sales of around USD1 billion.